Government of Meghalaya

Budget Speech

2001 - 2002

By

Shri A. H. Scott Lyngdoh

Finance Minister, Meghalaya

27th March, 2001

Mr. Speaker, Sir,

I rise to present the Budget Estimates for the
year 2001-2002. This is the fourth Budget of this august House and our
first for the twenty first Century. It reflects proposals for the fifth
and final year of Ninth Five Year Plan.

I. INTRODUCTION

Like last year, the Planning Commission is yet to
finalise the size of the Annual Plan for the year 2001-02. In fact, the
size of the current year's annual plan at a core level of Rs.48,000
lakhs was finalised by the Commission during November 2000 only. The
Draft Annual Plan for the year 2001-02 as submitted to the Planning
Commission, formulated on the basis of our provisionally estimated
resources, provides for a core Annual Plan of Rs.55,2000 lakhs, which is
15 percent higher than the level of the current year's approved core
plan. This has been incorporated in our Budget Estimates subject to
adjustment, mulatis-mutandis, as and when the Planning Commission
finalises the size of our Annual Plan for next year.

The recommendations of the Eleventh Finance Commission (EFC),
announced during the current year were favorable to us in certain
aspects, but unfavorable in others.

While our Revenue Gap Grant increased from Rs.31,642
lakhs under the Tenth Finance Commission (TFC) Award to
.Rs.1,57,238 lakhs under the EFC Award, our Share of Central Taxes
decreased from Rs.1,30,636 lakhs under the TFC Award to Rs.1,28,702
lakhs under the EFC Award.

During the current year, our Revenue Gap Grant is
Rs.33,813 lakhs as against no grant during 1999-2000. However, our Share
of Central Taxes during the current is Rs.18,4888 lakhs as compared to
Rs.34,176 lakhs during 1999-2000. However an amount of Rs.4,340 lakhs
released to our State in excess of our Share of Central Taxes during the
period 1996-97 to 1999-2000 has been partly adjusted against our current
year's share, further eroding our resource base.

Further, unlike the Award to earlier Finance
Commissions, the EFC Award has linked 15 per cent of the amount awarded
to States to cover their revenue gap, to adoption and implementation of
fiscal reforms, such as widening the tax base, increasing tax rates on a
year to year basis, pricing services such as irrigation, water charges,
bus charges, reducing subsides, abolition of vacant posts in Government
except those of Primary Teachers and Health Workers, resorting to
contract appointments, works, moratorium on all new work-charge and
casual appointments, phased reduction of non-plan expenditure,
downsizing of Government, moratorium on creation on posts, etc. Thus
only 85 percent of our Revenue Gap Grant for the current year amounting
to Rs.28,741 lakhs is available. The remaining 15 percent amounting to
Rs.5,072 lakhs has been reserved and transferred to an Incentive Fund,
for subsequent release depending on our progress in implementing fiscal
reforms.

In this connection, I wish to inform this august
House that the Central Government has specified that releases from the
Incentive Fund will be based on a single monitorable fiscal objective,
namely, each State will be expected to achieve a minimum improvement of
5 percent in their revenue deficit or surplus as proportion of their
revenue receipts each year, till 2004-05, with 1999-2000 as the base
year.

The actual budgetary surplus of our State for the
year 1999-2000 as certified by the Accountant General Meghalaya is
Rs.157.46 lakhs as against Actual Revenue receipts of Rs.94,364,98 lakhs,
resulting in a surplus of 0.16 per cent.

Our continuing economy measures is expected to result
in a further improvement over the position reflected in the Revised
Estimates for the current year and to yield a budgetary surplus of about
Rs.2,889,83 lakhs as against revised Revenue receipts of about
Rs.123,722.19 lakhs, resulting in a budgetary surplus of 2.33 per cent.

Thus, our budgetary surplus of our State for the year
1999-2000 as certified by the Accountant General Meghalaya is Rs.157.46
lakhs as against Actual Revenue receipts of Rs.94,364.98 lakhs,
resulting in a surplus of 0.16 percent.

Our continuing economy measures is expected to result
in a further improvement over the position reflected in the Revised
Estimates for the current year and to yield a budgetary surplus of about
Rs.2,999 lakhs as against revised Revenue receipts of about
Rs.123,722.19 lakhs, resulting in a budgetary surplus of 2.33 percent.

Thus, our budgetary surplus as a percentage of
revenue receipts is likely to increase from 0.16 percent during
1999-2000 to 2.33 percent during 2000-01 reflecting an improvement much
in excess of the required 5 percent. We therefore qualify for release of
our current year's share of the Incentive Fund. However, releases from
the Incentive Fund will only be available to States commencing from next
year, with consequent improvement of our fiscal position during 2001-02.

Before, I present the Budget Estimates for 2001-02, I
propose Mr. Speaker, Sir to briefly reflect on the National Economy, the
State Economy and highlight some of the proposed programmes for the
year, besides indicating our present performances.

II. NATIONAL ECONOMY

2.1

The Union Budget presented to Parliament by the Union
Finance Minister on 28th February, 2001 indicates an expected growth
rate of 6 percent for the national economy during the current year.

During the period 1992-93 to 2000-2001, the national
economy grew at an average rate of 6.4 % per year as compared to 5.8 %
during the corresponding period in the 1980s.

Incidence of Poverty fell from 36 % during 19993-94
to 24 % or less during the current year.

The export-performance grew by over 20 % during
April-December, 2000 and compares favorably with the growth rate of
better performance economies.

Inflation increased to around 4 % during the current
year due to increase world petroleum prices. This has put a strain on
the national economy as a whole.

A new National Policy on Agriculture has been
announced. The multi-pronged strategy provides interalia for enhanced
credit flow to boost agricultural production and creation of adequate
storage infrastructure for perishable commodities through credit-linked
subsidy schemes.

An amount of Rs.3,800.00 lakhs has been provided in
the Union Budget 2001-02 for the "Technology Mission for Integrated
Development of Horticulture in the North Eastern States."

Corporatisation of Telecom Services has been
implemented and competition is being introduced in all service segments.
Overall teledensity is expected to reach 3.5 per hundred which works out
to double the teledensity achieved two years ago.

The year 2001-02 is expected to end with a fiscal
deficit of 5.1% as a percentage of the GDP.

III. STATE ECONOMY

3.1

The Net State Domestic Product at current prices
which stood at Rs.6,441 lakhs during 1972-73 rose to Rs.2,46,713 lakhs
during 1999-2000 and is likely to reach 2,80,620 lakhs during the
current year.

3.2

The Net State Domestic Product in terms of per capita
income at current prices registered an increase from Rs.538 during
1970-71 to Rs.11,678 during 1999-2000 as compared to an all India
increase from Rs.633 to Rs.16,047 during the same period.

3.3

The Advance Estimates of NSDP for the current year is
Rs.13,029 per capita as compared to an all India estimate of Rs.17,643.
The estimated annual growth during the current year is about 11.57
percent. However, the average per capita income is about 35.4 percent
lower than the average all India level.

3.4

The Gross State Domestic Product at constant prices
for the year 1998-99 as per Quick Estimates is about Rs.2,02,249 lakhs,
indicating a growth rate of 5.76 percent during 1999-2000. An improved
annual growth of 5.95 percent is expected during the current year.

3.5

The Tertiary Sector of our economy continues to
dominate other sectors. During 1999-2000 the share of this sector at
constant prices stood at 56.54 percent. It is expected to marginally
increase to 56.60 percent during the current year.

3.6

The contribution of the Secondary Sector is likely to
increase from 11.45 percent during 1999-2000 to 11.62 percent during the
current year.

3.7

However, the contribution of the Primary Sector is
likely to decline from 32.01 percent during 1999-2000 to 31.77 percent
during the current year.

IV. STATE FINANCES

4.1

The Annual accounts of the State for the year
1999-2000 have been verified by the State Accountant General as usual.
The audit Report on the Annual Accounts 1999-2000 reflects the following
position -

a.

The year opened with a budgetary deficit of Rs.3,614
lakhs.

b.

Against a total revenue receipt of Rs.94.365 lakhs,
the total revenue expenditure was Rs.92,779 lakhs resulting in a revenue
surplus of Rs.1,586 lakhs.

c.

Against the total revenue receipts, recoveries and
other receipts amounting to Rs.95,254 lakhs, the total revenue and
capital expenditure was Rs.1,19,540 lakhs resulting in a fiscal deficit
of Rs.24,286 lakhs.

d.

Against the fiscal deficit of Rs.24,286 lakhs, there
was an interest payment of Rs.9,809 lakhs resulting in a primary deficit
of Rs.14,477 lakhs.

e.

Against a total budgetary receipt of Rs.14,16,480
lakhs, there was a total budgetary expenditure of Rs.14,12,709 lakhs
resulting in a budgetary surplus of Rs.157 lakhs after adjusting the
budgetary deficit of Rs.3,614 lakhs.

4.2

The emerging position reflects a marked improved over
the fiscal position reflected in the budget estimates for the same year
as presented to the State Legislature. This has been possible due to
steps taken to generate additional fiscal resources and the continuing
economy measures.

4.3

Steps for generating additional resources and
exercising utmost economy through stringent economy measures including
the system of letter of Credit and Letter of Allotment have been
continued during the current year. Such measures have resulted in the
budget estimates for 2000-01 being revised as follows -

a.

The revised estimates for the year 2000-01 reflect an
opening balance of Rs.157 lakhs.

b.

Against a revised revenue receipt of Rs.1,23,722
lakhs the revised revenue expenditure is Rs.1,19,286 lakhs resulting in
a revenue surplus of Rs.4,593 lakhs.

c.

Against a revised total budgetary receipt of
Rs.14,97,043 lakhs, the revised budgetary expenditure is Rs.14,94,310
lakhs resulting in a budgetary surplus of Rs.2,890 lakhs including the
opening balance of Rs.157 lakhs.

4.4

It is proposed to continue with the economy measures
currently in force besides resorting to additional resource mobilisation
in terms of fresh taxation proposals which I will make later today.
These are expected to result in further improvement of the State's
fiscal health. The budget estimates being presented today for the year
2002-2002 propose as follows -

a)

An opening balance of Rs.2,890 lakhs.

b)

A total revenue receipt of Rs.1,32,113 lakhs against
a total revenue expenditure of Rs.1,35,483 lakhs resulting in a revenue
deficit of Rs.3,370 lakhs. However the estimated revenue deficit of
Rs.3,370 lakhs will be entirely made up by the anticipated release of
Rs.5,072 lakhs from the Central Incentive Fund as already indicated.
Further additional resources generated and attendant economy measures
will result in further savings and the year is expected to close with
adequate revenue surprises.

c)

The total budgetary receipts during the year are
estimated at Rs.15,40,285 lakhs against a total budgetary expenditure of
Rs.15,38,593 lakhs resulting in a budgetary surplus of Rs.4,582 lakhs,
which is likely to further improve as a consequence of the measures
already indicated.

4.5

As indicated in my budget speech for the year
2000-01, the Letter of Allotment system has now been introduced in all
Departments of the State except in relation to payments of salaries and
allowances. The system has proved useful and resulted in appropriate
regulation and control of spending from the public exchequer. These
measures will continue.

V. HOUSE COMMITTEE

5.1

Along with the budget estimates for the current year,
I shall also be presenting a Vote-on-Account for covering expenditure
during the first three months of the year 2001-02, for consideration of
this august House. The full budget will be taken up for consideration
during the re-assembled Budget Session which is likely to be held during
June 2001.

5.2

It is expected that while considering the budget
estimates, the Hon'ble Members would have the benefit of the suggestions
of the House Committee.

VI. NON-PLAN BUDGET 2001-2002

6.1

The Non-Plan Budget Estimates for 2001-2002 envisage
an outlay of Rs.1,09,642.47 lakhs which is 13.6 percent higher that a
likely non-plan expenditure of Rs.96,458,03 lakhs during the current
year. Every attempt has been made to adequately provide for normal
maintenance and recurring expenses, amortisation of debts and
liabilities and critical maintenance cost of normalised projects. While
fiscal measures to contain avoidable non-plan expenditure will continue,
adequate care has been taken to ensure that critical and unavoidable
segments of expenditure are protected and sufficiently provided for.

VII. PLAN BUDGET 2001-2002

7.1

The approved Ninth-Plan outlay is Rs.2,50,062 lakhs.
The plan expenditure during 1997-98, 1998-99 and 1999-2000 were
Rs.24,883 lakhs, Rs.29,909 lakhs and Rs.34,328 lakhs, respectively.
Although the approved core Plan size for the current year is Rs.48,000
lakhs, the revised Plan size based on available resources is likely to
be Rs.46,700 lakhs only, which is 33.4 per cent higher than the revised
plan size of Rs.35,000 lakhs during the year 1999-2000. Thus the
cumulative plan expenditure during the first four years of the Ninth
Plan is likely to stand at Rs.1,35,820 lakhs which is 54.3% of the
approved size of the Ninth Plan.

7.2.

The proposed Annual Plan size of Rs.55,2000 lakhs for
the year 2001-2002 is 18.2% higher than the likely plan expenditure of
Rs.46.700 lakhs during the current year.

VIII. DEPARTMENTAL PROGRAMMES LAW & ORDER

Peace and harmony are essential pre-requisites for
growth and development. The State has remained free from communal
disturbance during the year. However, local militant outfits have
resorted to a number of killings and kidnapping giving cause for concern
and evoking angry public response. With the declaration of the HNLC and
ANVC as unlawful Associations by the Government of India, these militant
organizations have intensified their criminal activities in different
parts of the State. Government is committed to wean away members of such
Outfits through appropriate rehabilitation schemes. Appeals have also
been made to such misguided groups to come over ground for negotiations
and join the main stream of public life. Church Leaders and responsible
citizens have been playing positive and commendable roles in this
regard. 29 militants belonging to the ANVC have come forward and
surrendered. Government accords the highest priority to the
rehabilitation of such surrendered militants and every effort is being
made for this early rehabilitation.

8.1. AGRICULTURE INCLUDING HORTICULTURE

Agriculture plays a predominant role in the State's
economy. Land utilization statistics indicate that the gross cropped
area of 2.49 lakh hectares during 1996-1997 is likely to increase to
3.00 lakh hectares during the current year reflecting an increase of
21.4 percent during the period. The gross cropped area is expected to
increase to 3.20 lakh hectares during 2001-2002.

The current year is expected to end with a total
foodgrain production of 2.28 lakh tonnes, recording an increase of 28
percent over the total production of 1.78 lakh tonnes during 1996-1997.
Rice which is the major crop accounts for 1.51 lakh tonnes or 66 percent
of the total foodgrain production. The target food grain production for
the next year has been fixed at 2.41 lakh tonnes.

Of the commercial crops, potato account for 56.7
percent of the total production. The production of potato is likely to
increase from 2.00 lakh tonnes during 1996-1997 to 2.39 lakh tonnes
during the current year, registering an increase of 19 percent during
the period.

Horticultural produce which stood at 2.10 lakh tonnes
during 1996-1997 is expected to increase to 3.70 lakh tonnes during the
current year indicating an increase of 76 percent over the period. This
production is expected to further increase by 39.7 percent to 5.17 lakh
tonnes during 2001-2002.

However, production from High Yielding Varieties of
paddy, wheat and maize has fallen from 104.75 lakh tonnes during
1996-1997 to 98.10 lakh tonnes during the current year. The matter is
receiving attention and corrective measures are being initiated.

The commissioning of the two principal Regulated
Markets established by the State Agricultural Marketing Boa at Mawiong
and Garobadha is expected to ensure a fair deal to the farmers in terms
of general and cold storage facilities and auction platforms. Efforts
are being made to preempt the practice of day end distress sales of
agricultural produce.

The plan investment in the Agriculture Sector
increased from Rs.1060.25 lakhs during 1996-1997 to a revised level of
Rs.1325 lakhs during the current year. An amount of Rs.1919 lakhs is
proposed for this sector during 2001-2002 reflecting an increase of 44.8
percent.

8.2. SOIL AND WATER CONSERVATION.

The cumulative results of Soil & Water management
efforts over the last twenty-eight years of our Statehood are reflected
in the increase of developed agricultural lands with assured irrigation
from 1500 hectares during 1972-1973 to 44,561 hectares during the
current year and a corresponding increase in afforested degraded lands
from 1053 hectares to 30,253 hectares, over the same period. Similarly,
the area under erosion-control and cash crop plantations rose from 102
hectares and 363 hectares to 9366 hectares and 10,299 hectares,
respectively. The programme for weaning away Jhummia-families, presently
numbering around 49,500, is being accelerated. The sectoral target for
2002-2003 includes-

(i)

Land Development,
afforestation and water distribution covering and area of 2563 hectares,
besides maintenance of 2718 hectares of existing plantations.

(ii)

Erosion Control Works over 849 hectares;
and

(iii)

Water harvesting and farm-ponding over an
area of 320 hectares.

The plan investment on this sector
increased by 52.8 percent from Rs.556 lakhs during 1996-1997 to the
revised level of 850 lakhs during the current year. An outlay of Rs.947
lakhs is proposed for this sector during 2001-2002.

8.3. ANIMAL HUSBANDRY AND DAIRY DEVELOPMENT.

The increase in the Plan investment from Rs.546.14
lakhs during 1996-1997 to the revised allotment level of Rs.810 lakhs
during the current year is indicative of the importance attached to this
sector Production estimates indicate that over 27 percent of the annual
egg and meat requirement is met through supply from other States. Every
effort is being made to achieve self sufficiency in this field.

Egg production is expected to increase from 79
million during 1996-1997 to 87 million during the current year, and meat
production from 27,700 tonnes to 33,000 tonnes over the same period. Egg
and meat-production for 2001-2002 is targeted at 90 million and 34,000
tonnes respectively.

Milk production has similarly registered an increase
from 0.57 lakh tonnes to 0.64 lakh tonnes during the last five years.

Plan investment on this sector increased from Rs.546
lakhs during 1996-1997 to Rs.810 lakhs during 200-2001. The Plan outlay
for 2001-2002 has been tentatively fixed at Rs.1,332 lakhs.

8.4. FISHERIES.

Fish production in the State account for about 20
percent of our annual requirement. Every effort is being made to
increase fish culture in the private sector, besides making better
utilisation of available natural water bodies, in order to bridge the
demand-supply gap with in the shortest possible time frame.

Inland fish production registered an increase from
4400 tonnes during 1996-1997 to an expected level of 5000 tonnes during
the current year.

In order to encourage fish production, the sectoral
outlay for this sector has been increased by 59 percent over the current
year's revised level and proposed at Rs.175 lakhs during 2001-2002.

8.5. COOPERATION.

The Cooperative Movement in the State has progressed
over the year. During the period April, 1999 to December, 2000, 44 new
Cooperative Societies were registered. The total turnover of Consumer
Cooperatives during 1999-2000 was around Rs.355 lakhs. The sectoral plan
outlay increased from Rs.219 lakhs during 1996-97 to a revised level of
Rs.300 lakhs during the current year.

The Meghalaya Cooperative Apex Bank now has 37
branches, both in rural and urban areas. As a major agricultural credit
institution, the Bank has achieved a fairly good Credit : Deposit Ratio
of 33.71 percent as compared to the average level of 19.97 percent for
all Banks in the State.

Activities to be undertaken under this sector during
2001-2002 include revitalisation of cooperatives through effective
cooperative education and training, strengthening of marketing
cooperatives and supply of quality goods to consumers.

As against a revised sectoral outlay of Rs.300 lakhs
during the current year, an outlay of Rs.444 lakhs has been proposed for
the year 2001-2002.

8.6. FORESTRY & WILDLIFE

In accordance with the directives of the Supreme
Court, Working Plans for the operation of State Forests have been
approved by the Central Government. However, the operation of these
Plans is subject to the recent directions of the Apex Court.
Requirements contained in the aforesaid directions are being met and the
Working Plans are expected to be operationalised shortly.

The Autonomous District Councils are being assisted
in the preparation of Working Plans for forests under their control.
Likewise, steps have been taken to support the preparation of Working
Plans of private plantations.

As a long term measure to conserve flora and fauna,
an Armed Forest Protection Force is being set up in the State. An amount
of Rs.1000 lakhs has been provided under the Eleventh Finance Commission
Award.

Government proposes to set up a Bio-Diversity
Research Centre in the State. A suitable plot of land has been
identified in Ri-Bhoi District and acquisition of the site of
establishment of the Centre will shortly be completed. The programme
will be funded by the Central Government.

With a view to provide alternative means of
sustenance to the upland poor, particularly forest plantation workers
who had been adversely affected by the implementation of Apex Court
Orders regulating felling of trees, efforts have been made to implement
a project for the development of Forestry and Non-Timber Forest Produce
(NTFP) with particular emphasis on raising and utilisation of bamboo.
Project proposals were discussed by a State delegation headed by the
Chief Minister with the International Fund for Agricultural Development
(IFAD) at Rome from 21st-27th February, 2001, on the basis of a project
pre-feasibility report drawn up by a Three-Member IFAD Mission which had
visited the State during October-November, 2000. The discussions with
IFAD were attended by representatives of-

The International Network for Bamboo &
Rattan (INBAR), Beijing.

The Food & Agricultural Organization
(FAO) of the UN

The World Trade Organization (WTO)

The United Nations Conference for Trade
& Development (UNCTAD)

The International Trade Centre (ITC)

The International Development Resource
Centre (IDRC)

The International Bamboo Expert Professor
Walter Leise

The discussion with IFAD resulted in IFAD
agreeing to -

(1)

Develop a pro-poor, pro-women and
pro-youth project for Meghalaya;

(2)

Provide indicatively about USD 15 million
equivalent from its own resources;

(3)

Make an effort to mobilise an
additional USD 15 to 20 million from other agencies provided that
significant progress in peace and reduction in conflict is achieved.

The proposed project funding from IFAD
will be routed through the Government of India and is expected to
flow to the State as 90% Grant and 10% loan, as per usual process.

The Institutional frame work for
implementation of the proposed project will depend upon the
recommendation of the Project Formulation Mission. Normally, IFAD
implements its' projects through it's own field organisation/offices.

In pursuance of the aforesaid decisions,
IFAD has informed State Government on 09.03.2001 that-

ITC has agreed to undertaken a joint
IFAD-ITC project development effort for the proposed IFAD project in
Meghalaya.

ITC has agreed to provide technical
assistance during the implementation of the proposed project.

The Tenural Right Study Mission will
commence in Meghalaya shortly.

A Joint IFAD-INBAR-UNIDO Market Study
Mission will commence its work soon and submit its Report within
September, 2001;

The project Inception Mission will be
fielded during November, 2001;

The Project Formulation Mission will be
fielded during January-February, 2002 or April-May, 2002.

8.7. RURAL DEVELOPMENT

The major achievements during the current
year under this sector include-

(a)

Creation of durable community assets through
utilisation of an amount of Rs.266 lakhs under the centrally sponsored
Jawahar Gram Samridhi Yojana (JGSY) Scheme.

40 villages are being
connected during the year under the recently launched Pradhan Mantri
Gram Sadak Yojana (PMGSY).

(d)

10000 families being provided
Prime Minister's Gramodaya Yojana support under the housing component of
the PMGY during the year.

Efforts to bridge critical gaps in the
rural infrastructure in selected sectors will continue under the
Employment Assurance Scheme. During the year, an amount of Rs.248 lakhs
has been utilised under the scheme.

1430 new shelters have been completed and
734 shelters upgraded during the current year, under IAY.

14,323 old and destitute citizens, 2883
mothers and 326 other beneficiaries are expected to benefit during the
current year under the National Social Assistance Programme.

8.8. RURAL EMPLOYMENT

Till December, 2000, 734000 mandays of rural
development has been generated under the different Centrally Sponsored
Employment Generation Programmes. It is expected that a total 985000
mandays of employment will be generated by the end of the year.

The programmes will continue with added vigour during
2001-2002.

8.9. COMMUNITY DEVELOPMENT

The success of a delivery system is often measured by
the efficacy of development administration at the grass root level. The
Community and Rural Development Blocks which are our grass root level
institutions have been performing satisfactorily.

It has been decided to create 7 new Community and
Rural Development Blocks under the Eleventh Finance Commission Award,
during the current year. This will accelerate the pace of rural
development and ensure that the benefit of development reaches the rural
masses more effectively.

An amount of Rs.780lakhs has been allocated for this
sector during 2001-2002.

8.10 SPECIAL RURAL WORKS PROGRAMME [SRWP]

During the current year, allocation under this
programme has been increased from Rs.20.00 Lakhs to Rs.25.00 Lakhs per
rural Assembly Constituency and from Rs.10.00 Lakhs to Rs.12.50 Lakhs
per semi-rural Assembly Constituency.

This programme has generated sustainable community
assets and will continue as a major programme under the Rural
Development Sector.

8.11. CHIEF MINISTER'S SPECIAL RURAL DEVELOPMENT FUND

Guidelines for formulation, approval and
implementation of the programme have been finalised. The programme will
continue during 2001-2002.

8.12.BORDER AREAS DEVELOPMENT PROGRAMME

Border areas in the State account for a total of 1523
villages located within 10 kilometres of the international boundary with
Bangladesh and cover an area of approximately 4230 Sq. Kms. Border Area
Development Schemes are implementing through different departments in
order to improve the economic condition of the people inhabiting these
areas.

During the current year, 15,353 students hailing from the
Border areas have been covered the Border Areas Scholarship Scheme. It
is proposed to cover another 25,00 students under the scheme
during 2001-2002

The main focus of Border Are Programme during the
current year has been on rural electrification, construction of School
buildings, market stalls, ropeways, community halls, footpaths and
footbridges. During 2001-2002, priority will be given to construction of
link roads, water supply schemes and electrification of border villages
under Special Central Assistance

An amount of Rs.812 lakhs is proposed to be provided
for the programme during 2001-2002.

8.13. MEDIUM IRRIGATION & FLOOD CONTROL

The Rongai Valley Irrigation Project sanctioned at a
cost of Rs.1630 lakhs is the only Medium Irrigation Project in the
State. Over 66 percent of the barrage works have been completed. The
project is expected to be completed by the end of the year2003.

The estimates for survey and investigation of
Kodaldhowa, Pynthornein and Mawrambah Valley Medium Irrigation Projects
have been sanctioned. Investigation works on these projects are in
progress during the current year.

The plan allocation under this sector is proposed to be
increased from the revised level of Rs.550lakhs during the current year
to Rs.795 lakhs during 2001-2002.

8.14. MINOR IRRIGATION &COMMAND AREA DEVELOPMENT

An additional area of 6927 hectares is expected to be
brought under Minor Irrigation by the end of the Ninth Five Year Plan
Period bringing the total area under irrigation to 28,147 hectares.
However this represents only 12.9 percent of the total irrigation of the
State.

Government have decided to create a separate
Directorate of Irrigation which is expected to become functional from
2001-2002. With this development, it is expected that the Irrigation
potential of the State will be exploited to the fullest extend.

The provision for Minor Irrigation Sector has
been increased from the revised level of Rs.710 lakhs during the current
year to Rs.1100 lakhs during 2001-2002 reflecting an increased of 54.9
percent. A provision of Rs.200 lakhs has also been made for the Command
Area Development programme during 2001-2002..

8.15. POWER

During the current year, the Central Government has
released an amount of Rs.600 lakhs for improvement of Power Supply in
Tura, Rs.400lakhs for improvement of Power Supply in Shillong and Rs.75
lakhs for electrification of 10 tribal villages, from the Non-Lapsable
Pool of Central Resources.

Environmental clearance for the 2 × 42 MW
Myntdu-Leishka Project is yet to be issued by the Central Government.
Implementation of the project which has been techno-economically cleared
by the Central Electricity Authority at a revised cost of Rs.36,305lakhs
is expected to commence during 2001-2002.

The renovation and modernisation of Umiam Stage-1
Power Station is in an advanced stage of progress. The approved outlay
during the current year is Rs.570 lakhs. The proposed outlay for this
purpose during 2001-2002 is Rs.620 lakhs.

With the increasing energy-demand in the industrial
areas of Byrnihat, the Meghalaya State Electricity Board has formulated
a proposal for setting up of two Heavy Fuel based Power Stations of 4 ×
6 MW each, costing an estimated amount of Rs.9000 lakhs for each
station.

During the current year, the State Government has
initiated the 'Clean Umiam' project with a view to contain siltation and
further pollution of the Umiam Lake.

8.16. NON CONVENTIONAL SOURCES OF ENERGY/IREP

The Meghalaya Non-Conventional and Rural Energy
Development Agency (MNCREDA) is implementing Solar Thermal and Solar
Photovoltaic schemes which include the installation and distribution of
Solar Cookers. Solar Centralised Power Packs and Solar Lanterns.

Three 100 KW Micro Hydel Projects at Galwang in West
Garo Hills, Rongap in East Garo Hills and Umlieh in Ri-bhoi District are
proposed to be taken up during 2001-2002.

8.17. INDUSTRIES

Incentives available to industrial entrepreneurs
under the State Industrial Policy, 1997, the Excise concessions extended
by the Government of India and the establishment of the Export Promotion
Industrial Park (EPIP) at Byrnihat have created a favourable atmosphere
for the development of Industries in the State. The Single-Window Agency
has cleared a total of 112 applications with a potential investment of
Rs.43,200 lakhs and an employment potential of 7185.

The Promotional activities under this sector include
the creation of infrastructure like the Export Promotion Industrial Park
(EPIP) at Byrnihat, the Growth Centre at Mendipathar, the Industrial
Area at Umiam and the Industrial Estates located at Jowai, Tura,
Nongstoin, Williamnagar and Mendipathar.

State Government has, so far, approved the
establishment of 21 industrial units at the EPIP, Byrnihat. Land
Acquisition proceedings for acquisition of 173.23 hectares of land for
the Mendipathar Growth Centre have been initiated

Training Schemes under this sector include
Entrepreneur Development Programme, Man-Power Training and Training of
Artisans and Entrepreneurs inside and outside the State. During the
current year, 132 students were sponsored by MIDC for undertaking
specialized courses in Engineering, Computer Science, Chartered
Accountancy, Management and other professional courses. 122 artisans and
entrepreneurs were trained locally while 16 were trained outside the
State.

The Khaddar & Village Industries Board continue
to implement Rural Employment Generation Programmes, Block Development
Schemes and Consortium lending. During the current year, 50
beneficiaries were sponsored by the KVIB under the margin Money Scheme.

The MCCL is facing a stiff competition in marketing
its products in view of the emerging new brands of cement. With the
implementation of the ongoing modernisation plan, the Company is
expected to overcome its present competitive discomfiture.

Production of cement during the current year is expected
to reach 1,20,000 tonnes as compared to 1,14,700 tonnes during
1999-2000.

The proposed plan outlay for this sector is Rs.1,300 lakhs
during 2001-2002.

8.18. SERICULTURE 7 WEAVING

The focus of this sector is for increased production
of Silk-Cocoons and Handloom Fabrics through mobilisation of existing
resources and infrastructure.

Besides implementation of the NEC funded project for
the Integrated Development of Muga, the Department continues to
implement the Catalytic Development Programme of the Central Silk Board
and the UNDP assisted sub-programme for development of Eri and Muga.
Schemes under the Deen Dayal Hathkargha Protshahan Yojana will also be
implemented during 2001-2002.

Additional plantation coverage of 483 Hectares under
Mulberry, Eri and Muga is proposed to be taken up during 2001-2002. This
is expected to result in a production of 4,38,000 Kilograms of Mulberry
and Eri Silk Cocoons and 2,26,80,000 Muga Cocoons during 2001-2002.

The production of Mulberry and Eri Silk Cocoons in
the State has increased from 2,61,000 Kilograms during 1996-1997 to an
expected level of 3,75,000 Kilograms during the current year. Similarly,
the production of Muga Silk Cocoons is expected to increase from
62,74,000 to 1,14,00,000 over the same period.

Likewise, the production of handloom fabric in the
State has registered and increase from 33,58,000 square metres during
1996-97 to an expected level of 67,60,000 during the current year.

8.19. MINING & GEOLOGY

The Department of Mining & Geology will continue
its effort to tap the mineral resources of the State, besides
intensifying mineral investigation.

During the current year, six on going mineral
investigations have been continued and one new investigation has been
taken up. In addition, nine geological investigations are taken up
annually.

Till December, 2000, the production of coal and
limestone during the year is 26,19,000 tonnes and 2,47,000 tonnes
respectively.

In order to mobilise additional revenue and to check
evasion of revenue, the Department proposes to install electronic
weigh-bridges at Gasuapara and Dawki during 2002-2002.

An amount of Rs.3,223 lakhs has been collected as
revenue from mineral resources upto December, 2000.

8.20. ROADS & BRIDGES

Since road transport is the only means of
communication, the development and strengthening of road infrastructure
occupies a central place in the overall development strategy of the
State. The road sector continues to receive the highest priority. During
the current year, Rs.9,470 lakhs or 20 percent of the revised plan
outlay has been allocated to this sector.

The total road length of the State till the end of
1999-2000 was 7117 Kilometres, resulting in a road density of 31.73 Kms
per 100 Square Kilometre which is below the national norm of 40
Kilometres per 100 Square Kilometre. The ongoing efforts are likely to
result in 7267 Kilometres of road-length by the end of the current year.

2633 villages have been connected by roads till the
end of March, 2000. 60 more villages are expected to be connected with
roads during the current year.

8.21. ROAD TRANSPORT

Government continues to pursue a liberal policy in
issuing road permits for operation of transport services. The
enforcement machinery is being streamlined to curb evasion of motor
vehicle tax and plying of illegal and unauthorised vehicles.

8.22. OTHER TRANSPORT SERVICES.

The construction of Baljek Airport has been completed
at a cost of Rs.1,221 lakhs. The Government of India has released an
amount of Rs.318 lakhs during the year for this purpose, from the
Non-Lapsable Central Pool of Resources. Steps are being taken to
operationalise the airport at the earliest. The proposed up-gradation of
the Umroi Airport is expected to materialise during 2001-2002.

The programme for establishment of ropeways, wayside,
amenities, motor driving schools and assistance to transport operators
belonging to the weaker sections, for procurement for vehicles, will
continue.

Helicopter Service between Shillong, Guwahati and
Tura will be continued during 2001-2002. Expansion of such services to
other district headquarters will be undertaken when feasible.

8. 23. MEGHALAYA TRANSPORT CORPORATION.

The Meghalaya Transport Corporation operates on 39
routes covering a distance of 5,265 Kilometres. 10 new bus chassis have
been acquired during the year to replace old and condemned ones. The
Corporation has been running on continuing losses. Government is
exploring ways and means to revitalize the Corporation including
privitisation.

8. 24. SCIENCE & TECHNOLOGY

Introduction of Appropriate Technologies is the main
programme under this sector. The programme emphasises on generation of
awareness and training of people on appropriate technologies. The
Technology initiation Programme which has launched recently will
continue

The programme on popularisation of Silence &
Technology involving Science Exhibition Workshop and Environmental Fairs
will also continue.

Proposal for setting up of a Technology Park at
Nongpoh and establishment of three Centrally-funded Technology Parks in
East Khasi Hills, West Khasi Hills and Ri-Bhoi Districts are expected to
be taken up during 2001-2002.

8. 25. TOURISM

Tourism is an eco-friendly industry with an enormous
potential which can be suitably exploited and harnessed for the overall
development of the State. Meghalaya has an edge over other tourist
destinations in the North-East as it possesses a unique of different
cultures and and congenial climatic conditions.

The State Tourism Policy was announced on the 15th
February, 2001. The Policy envisages the creation of employment
opportunities for the youth of the State, projection of a tourist
friendly image in order to attract tourists from all over the country as
well as from overseas, extension of socio-economic benefits to the
community in terms of better income generation and foreign exchange
earnings and encouraging local enterprise towards setting up a
facilitative infrastructure like Hotels, Health Resorts, Amusement Parks
and Tourism Units, through a package of incentives. This initiative is
expected to result in the required thrust destination to enable the
State to emerge as the best tourist destination in the North East in the
years to come.

During 2001-2002 the Department proposes to take up
development of view points in different places of South Garo Hills and
East Garo Hills Districts and at Sung Valley in Jaintia Hills District,
construction of cottages and suspension bridge-crossing to Nongkhnum
Island, construction of Yatri Niwas at Jowai, Tourist Lodges at Mahadeo
and Nongstoin and also commissioning of the Yatri Niwas at Tura, Tourist
Lodges at Baghmara and Siju and Wayside Amenities at Anogiri.

The long-drawn litigation over the construction of
the Crow borough Hotel was finally concluded in an out of court
settlement. The State Government is taking steps for early completion of
the building and for creation of income generating facilities in order
to sustain the Meghalaya Tourism Development Corporation.

8. 26. CIVIL SUPPLIES

The Public Distribution System is serviced through a
network of 649 Fair Price Shop in urban areas and 3,646 Fair Price Shop
in rural areas. The Operation of the Fair Price Shops will be closely
monitored and supervised to ensure that they serve the best public
interest.

During the year, the State Commission and the
District Forum have disposed of 262 out of the 340 cases registered with
them.

8. 27. AUTONOMOUS DISTRICT COUNCILS.

State Government will continue to work closely with
the Autonomous District Councils. The programme for providing
grants-in-aid to the District Councils for construction of village
roads, footpaths, bridges, playgrounds. Councils own office buildings
and improvement of rural markets will continue. An amount of Rs.966
lakhs has been proposed in the Budget Estimates for such purposes.

8. 28. EDUCATION ( GENERAL & TECHNICAL EDUCATION)

Education continues to receive high priority. About
12 percent of the Plan outlay is earmarked for this sector. The State
will continue in its efforts to improve educational standards including
facilities and service conditions of teachers.

Over 38 percent of Primary Schools and 27 percent of
Upper Primary Schools do not have permanent buildings. Construction of
Primary School buildings will be undertaken during 2001-2002 under the
Eleventh Finance Commission Award as well as under the PMGY Scheme.

During the current year, over 3,19,000 students are
enrolled in Primary Schools and over 91,000 students in Upper Primary
Schools reflecting a very high drop out rate of over 2 in 3 between the
Primary and Upper Primary stages.

Over 61 percent of Primary School Teachers and 73
percent of Upper Primary Teachers in the State have not been trained.
The District Institutes of Education and Training (DIET) at Thadlaskein,
Sohra and Resubelpara have been made operational with a view to improve
the quality of Elementary Education. While civil works for
operationalising the DIETs at Nongstoin, Nongpoh and Baghmara are
presentably underway, the Central Government has recently sanctioned one
more DIET for Tura. The percentage of trained teachers and the quality
of training are expected to further improve during 2001-02.

The Central Government has released Rs.1120 lakhs for
Elementary Education from the Non-lapsable Central Pool of Resources
during 2000-2001.

Pre-project activities for introduction of new
courses in the Shillong Polytechnic and the setting up of new
Polytechnics in Jowai and Tura have already been initiated under a World
Bank Assisted Project.

Education Department has regulated the number of
working days in Schools and Colleges to a minimum of 220 days in
conformity with national norms.

During the current year, opening-permission has been
granted tom 43 Secondary Schools, 13 Higher Secondary Schools and 6
Private Colleges.

An amount of Rs.5,090 lakhs has been proposed for this
sector during 2001-2002.

8. 29. ART & CULTURE

Efforts will continue to preserve, protect and
conserve the rich cultural heritage of the State. Research and
documentation of vanishing forms of art will receive priority attention.
Art consciousness and promotion of creative arts will be encouraged.
With a view to preserve traditional art forms, a scheme known as 'Living
Heritage' is being implemented.

The schemes for providing financial assistance to
voluntary cultural organisations and festivals will continued. The
Intensive Art and Culture Development Programme will be strengthened.

The Eleventh Finance Commission Award of Rs.40 lakhs
for Heritage Protection and Rs.107 lakhs for strengthening and
up-gradation of Public Libraries in the State will be utilised during
2001-02.

An amount of Rs.348 lakhs is proposed for this sector
during 2001-2002.

8.30 SPORTS & YOUTH AFFAIRS

Endeavor to promote Sports & Games will continue.
Development of sports infrastructure at village. Block and State level
will be encouraged.

During the current, 11 schemes for development and
up-gradation of Sports infrastructure have been completed.
Implementation of 40 ongoing projects located in different parts of the
State is making good progress.

Implementation of the Intensive Sports and Youth
Development Programme will be accelerated.

An amount of Rs.696 lakhs has been proposed in the
Budget Estimates for this sector during 2001-2002.

8. 31. HEALTH & FAMILY WELFARE

The Health sector will continue to receive priority.
During the current year, emphasis has been given up-gradation, extension
and consolidation of the urban and rural health infrastructure.

Up-gradation of the Orthopedic and Rehabilitation
Centre at the Shillong Civil Hospital is being implemented under NEC
funding.

The ongoing construction of 8 Community Heath
Centres, 16 Primary Health Centres and 5 Health Sub-Centres are expected
to be completed during the current year.

Government have notified the Meghalaya AIDS Control
Society for implementation of the World Bank sponsored programme for
control of AIDS.

The Centrally Sponsored National Programmes for
eradication of Malaria & Leprosy and Control of Blindness will
continue.

The new Intensive Care Unit at the Shillong Civil
Hospital is expected to the operationalised during the early part of
2001-2002.

An amount of Rs.3437 lakhs has been proposed in the Budget
Estimates, 2001-2002 for this sector.

8.32. WATER SUPPLY & SANITATION

The Central Government has fixed 2004 A.D. as the
year within which the entire population should be provided with safe
drinking water.

The programme for provision of safe drinking water to
all human habitations will continue to be taken up under the PMGY and
the Accelerated Rural Water Supply Programme.

During the current year, 150 uncovered habitations,
210 partially covered habitations and 35 iron-affected habitations are
expected to be covered under the ongoing schemes and provided with safe
drinking water supply.

All Urban Centres in the State are provided with safe
drinking water supply. Water supply augmentation schemes are under
implementation at Shillong, Jowai, Tura, Williamnagar, Nongstoin and
Cherrapunjee to cater to the increased demand for water. The Greater
Shillong Water Supply Scheme is partially complete. The remaining work
is in progress and likely to be completed during 2001-2002. The Central
Government has released Rs.675 lakhs for this project under the
non-lapsable pool of Central Resources, during the current year.

The construction of the Mass Gravity Concrete Dam
over River Umiew at Mawphlang is progressing. The project is scheduled
to be completed by March, 2002.

Under the Human Resources Development Programme, 844
persons have been trained till 1999-2000 in the operation and
maintenance of water supply schemes. This will facilitate the handing
over of completed water supply schemes to the village committees and
ensure their subsequent maintenance.

An amount of Rs.4293 lakhs has been proposed in the
Budget Estimates for 2001-2002 for this sector.

8.33. URBAN DEVELOPMENT

Efforts to provide adequate infrastructure and basic
civic amenities in all the urban areas of the state will continue.

The ongoing construction of a Parking Lot near the
District Council premises at Shillong is in progress and is expected to
be completed during 2001-02. Likewise, construction of a Parking Lot
near the Shopping Complex at Nongstoin is being initiated.

The construction of a Bus Terminal at Madanriting is
expected to commence during 2001-2002. Land Acquisition proceedings for
this purpose are being initiated.

The Shillong solid Waste Disposal Project is under
implementation and is likely to be completed during 2001-2002.

Efforts are being made to expedite the setting up of
the new Shillong Township. Land acquisition proceedings for the second
phase are proposed to be initiated shortly.

Development works for construction of the Nongstoin
Super Market have already been initiated. The project is expected to be
completed during 2002-2002.

In order to ease the present congestion of traffic in
Shillong. a multi-level parking-cum-commercial facility called the
Shillong Central Complex is being set up at Police Bazar. Construction
works will commence during 2001-2002.

An amount of Rs.3686.50 lakhs has been provided in
the Budget Estimates during 2001-2002 for this sector.

8.33- A. SPECIAL URBAN WORKS PROGRAMME [SUWP]

During the current year, the allocation under this
programme has been increased from Rs.20.00 lakhs to Rs.25.00 lakhs per
Urban Assembly Constituency and from Rs.10.00 lakhs to Rs.12.50 lakhs
per semi-urban Assembly Constituency.

Like the SRWP in rural areas, this programme has
generated sustainable community assets and will continue as a major
programme under the Urban Development Sector.

8.33-B. CHIEF MINISTER'S SPECIAL URBAN DEVELOPMENT FUND

Guidelines for formulation, approval and
implementation of the programme have been finalised. The programme will
continue during 2001-2002.

8.34.LABOUR & EMPLOYMENT

The total number of employment-seekers on the Live
Register of Employment Exchanges is 35,221. Of these, 85 candidates were
placed in employment during the year and 40 candidates attended coaching
classes in the coaching Cum-Guidance Centre.

The new Industrial Training Institute at Baghmara is
expected to be made operational during 2001-2002.

8.35. SOCIAL WELFARE & NUTRITION

The main activities under this sector include the
implementation of schemes for the welfare of the Women, Children,
Physically-Handicapped, Juvenile Delinquents, the Aged and Infirm.

131 physically-handicapped students supported with
scholarships and 53 given vocational training in different trades during
the current year. The Department also proposes to assist 90
physically-handicapped students with uniforms and Book Grants and 45
others with conveyance and Unemployment allowance.

823 Anganwadi workers and helpers, representatives
from NGOs and Community leaders are being trained under the World Bank
Sponsored project "UDISHA" during 2000-01.

The Supplementary Nutrition Programme for children
and Expectant and Nursing Mothers will continue to be implemented in all
Community and Rural Development Blocks. Under the new PMGY, the
Department proposes to cover 1,09,656 malnourished children in ICDS
areas and 16.461 in Urban areas.

The Central Government has sanctioned the
establishment of new Observation-cum-Special Home at Tura. The programme
for de-addiction and rehabilitation of drug addicts will be intensified.

The Centrally Sponsored Indira Mahila Yojana is
currently under implementation within Mylliem Community and Rural
Development Block. 73 Indira Mahila Kendras have so far been registered
under the scheme. The Centrally Sponsored Balika Samridhi Yojana will
also continue during 2001-2002.

8.36. POLICE

Within the operationalisation of the India Reserve
Police Battalion, the man-power reserves of the State Police has been
enhanced. We now have three Operational Battalions under the State Armed
Police Force.

About 85 percent of the State Police Budget is spent
on salaries. The remaining about is utilised for meeting basic
requirements such as uniforms, rations, mobility and other related
expenses.

66 units of Police Housing are proposed to be
constructed during 2001-2002. An amount of Rs.340 lakhs has been
proposed in the Budget Estimates for 2001-2002 for the purpose which
includes amounts available under the award of the Eleventh Finance
Commission.

Government is taking steps to modernise the State
Fire Service and the Forensic Science Laboratory. The Department also
proposes to set up mobile Forensic Laboratory Units in all the Districts
of the State. Two units have been sanctioned during 2000-01.

The Government of India has been extending annual
financial assistance to the State under the scheme of Modernisation of
the State Police Force. In addition, the Central Government also
provides assistance for modernisation of police force by providing
vehicles, arms, ammunitions and communication equipments.

8. 37. GENERAL ADMINISTRATION

Construction of the Second Meghalaya House on land
allotted by the Government of India at Vasant Vihar, New Delhi will be
taken up shortly.

Construction of the new Meghalaya House at Kolkata is
expected to be completed during the early part of 2001-2002.

Government also proposes to acquire 5 residential
houses at Vellore from the Tamil Nadu Housing Board for establishing a
Guest House for the convenience of Meghalayans.

Construction of Yojana Bhavan as an extension of the
Main Secretariat is expected to be completed during 2001-2002.

Construction of Circuit Houses at Khliehriat and Mawkyrwat
is in good progress.

The Meghalaya Legislative Assembly Building which
will long be remembered for its artistic beauty was gutted down by fire
on January 9,2001. Construction of the new building will be taken up
during 2001-2002.

The Government of Assam have allotted a plot of land
measuring 7 big has at He4ngarabari, Guwahati to the State Government
for construction of Meghalaya House. The plot was formally handed over
to the State Government on 05.03.2001.

Three Plots of Defense Land measuring a total of 3.66
acres were handed over to the State Government on 12.10.2000. Steps are
being taken to develop and convert these lands into public utilities for
the benefit of the people of the state.

8.38. INFORMATION TECHNOLOGY

Information Technology has emerge as a promising
sector in the Indian economy which is capable of generating large scale
employment for the educated unemployment. The State Government proposes
to tap this important sector for the benefit of the people, especially
the educated unemployed.

Government is taking steps to create a Department of
Information Technology and will ensure that this sector receives
adequate support for its growth and development.

8.39. INFORMATION AND PUBLICITY

The information and Publicity sector will continue to
strive for better public participation in the various developmental
programmes of the Government through proper dissemination of
information.

With a view to improve the information network and to
create better awareness amongst the public, the Department will procure
seven mobile audio-visual units, one for each district, during the
current year.

IX. BUDGET ACTUALS 1999-2000

The year 1999-2000 opened with a deficit of
Rs.3613.38 lakhs. While the total receipts during the year including
receipts under public Accounts amounted to Rs.14,16,480,42 lakhs, the
corresponding expenditure was Rs.14,12,709,58 lakhs, resulting in a
closing surplus balance of Rs.157.46 lakhs.

X. REVISED ESTIMATES 2000-2001.

The revised estimates for the current year reflects
an opening surplus balance of Rs.157.46 lakhs. While the revised
estimated receipts during the year including receipts under Public
Accounts are likely to amount to Rs.14,97,042.64 lakhs, the
corresponding expenditure is expected to amount to Rs.14,94,310.27
lakhs, resulting in an anticipated closing surplus of Rs.2889.83 lakhs.

XI. BUDGET ESTIMATES 2001-2002.

The estimates envisages an opening surplus balance of
Rs.2889.83 lakhs and a total receipt including receipts under Public
Accounts of Rs.15,40,284.54 lakhs against a corresponding expenditure
including expenditure under Public Accounts of Rs.15,38,592.98 lakhs,
resulting in an anticipated closing surplus of Rs.4581.39 lakhs.

XII. ADDITIONAL RESOURCE MOBILISATION -

Keeping in view the increasing revenue expenditure of
the State, as a consequence of increasing debt service burden and
spiraling establishment cost due to ever increasing market-price related
emoluments of Government employees, and the requirement of fiscal reform
to qualify for fiscal-reform related revenue gap grants, it is necessary
for the State to generate additional resources. I therefore propose to
give immediate effect to the under mentioned additional taxation
measures -

i

To increase the existing rate of Surcharge
under Meghalaya Finance Sales Tax Act, the Meghalaya Sales Tax Act and
the Meghalaya Purchase Tax Act from 5 per cent to 10 per cent.

ii

To increase the existing rate of Surcharge under the
Meghalaya Sales of Petroleum Products including Motor Spirit and
Lubricants Taxation Act from two per cent to ten per cent, but excluding
High Speed Diesel from such additional surcharge.

iii

To impose a luxury tax of twelve percent on
all varieties of cigarettes and cigars.

iv

To impose a cess of Ten Rupees per metric ton on coal
for generating additional resources for the development of education and
other social services.

v

To impose a cess of Five Rupees per metric ton on
limestone to generate resources for the development of education and
other social resources.

vi

To increase the rate of luxury tax on hotels
and lodgings by the percent on all slabs.

vii

To impose a one time cess of Rs.500 per mobile phone
connection including existing connections.

viii

To increase the driving license issue fee from Rs.150
to Rs.250 and a driving license renewal fee from Rs.15 to Rs.50.

ix

However, with a view to provide some incentive to the
construction of quality dwelling houses and other buildings, it is
proposed to decrease the rate of sales Tax on Paints, colours, lacquers,
varnishes, including glue, polish, turpentine thinners, putty, enamels
and indigo, from 16 percent to 8 percent.

The aforesaid measures are expected to generate
additional resources exceeding Rs.1000 lakhs during the year 2001-2002.

XIII. CONCLUSION.

In conclusion, it is my sincere expectation that with
the fullest support of all sections of this august House, the Budget
proposals that I have presented today, are unanimously carried and
effectively implemented, to ensure generation of conditions favorable to
accelerated and harmonious growth of the State economy, to fulfill the
rising expectations of every Meghalayan.

With these few words, may I Mr. Speaker, Sir commend
the Budget proposals for the consideration of this august House.